June 2021 - Week 5 Edition
Gold Mining Supply Declines for the Second Year in a Row
Most markets are based on supply and demand. The supply of new gold is extremely limited, and finding new gold is getting harder each year, while the supply of new dollars is expanding by trillions each year.
Gold is the perfect form of money due to its rarity, portability, beauty, indestructibility, divisibility and long heritage as money on all continents. In terms of rarity, gold is one of the rarest elements on earth, making up between 0.001 and 0.006 parts per million of the earth’s crust – that’s between one and six parts per billion. Nearly all of the easy or visible gold on the earth’s surface has been found. Now, gold miners are digging deeper to find fewer parts per million of gold at greater and greater expense. Just think of the TV show, Gold Rush.
According to the latest data released by the Word Gold Council (WGC), global gold mine production peaked in 2018 at 3,652.8 metric tons. Production declined 1.5% to 3,597.2 tons in 2019 and then fell another 3.3% to 3,478.1 tons in 2020 for a total decline of 5% in newly mined gold in the past two years.
Another major change comes in the source of that gold. South Africa was the leading source of gold in the 20th Century but it is no longer in the Top 10 among producers. The top two gold producing nations are America’s old Cold War foes, Russia and China, with China’s totals declining and Russia’s rising fast.
Call us today to find out what the best gold investment options are for your portfolio! We look forward to serving you. Have a safe and enjoyable 4th of July holiday.
U.S. Budget Deficit Soars
Gold and silver remain relatively firm but at slightly depressed levels as we approach the mid-year point but the generally falling U.S. dollar and rising U.S. budget deficit are both inflationary and should contribute toward long-term gains in gold prices. Our weekly price chart shows long-term gold vs. stock prices but once a month we will also show the situation with the dollar and deficits:
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